Compressed videos for Ipod Touch

I have been compressing my DVD Video Library to MP4 (H.264) with MPEG Streamclip 1.9, with limit data rate of 1200, interlaced scaling, audio AAC. While the 4:3 videos work fine, knowing that the Ipod forma is 640x480, the 16:9 files at 854x480 are not loaded on Ipod warning me that these videos are not playable on Ipod Touch.
What would be the settings to get the videos on track? The maximun size, in example, for a Planet Earth disc is around 1.8GB.

After trying everything on the horizon to try to get the best possible quality for the videos I did the simplest (almost always the simplest works), I put the videos on Itunes and it did the trick to convert all the videos to Ipod format.. problem solved....

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